Address members’ mobile wallet security concerns

What’s holding back consumers from adopting this tool?

First on the mobile wallet scene was Google Wallet in 2011. Next up was Apple Pay in 2014. Following closely in 2015 was Samsung Pay, with its sleek commercials promising freedom from your wallet.

When these mobile wallets hit the market, many people believed each would change the face of payments. But despite all the hoopla around these solutions—and others that have come since—some factor is keeping members from using these supposed “game changers.”

Until recently, the biggest obstacles the mobile wallet industry faced were ease of use and ubiquity in the marketplace. One additional culprit, it turns out, might be something else entirely—fear.

Mobile apps vs. mobile wallets

With the ever-growing fear of data breaches, malware, phishing, and other cyberthreats, concerns about security could be undermining the adoption of mobile wallets.

According to a global survey of 2,000 consumers NTT DATA conducted in partnership with Ingenico, Oxford and Charney, more than half of consumers believe mobile wallets are less secure than cash.

Some of this concern might stem from a recent study that found 400 malicious apps on Google Play. Despite that discovery, it’s important to note that mobile wallets and mobile payments aren’t your garden variety apps and remain one of the most secure ways to transact.

If credit unions can mitigate this fear, and merchants improve adoption for mobile, consumer mobile wallet adoption will begin to accelerate.

Educate members about mobile wallet

Mitigating members’ fears about mobile wallets will be difficult—especially if you can’t mitigate your own fears about supporting mobile wallets. Consider these three suggestions for addressing members’ concerns:

1. Stick with the big players.

While shopping for the no-name brand cereal might make sense to save a buck at the grocery store, doing so with mobile wallets might put your members at risk. Apple, Google, and Samsung are the biggest players in the mobile wallet space, and for good reason. They’ve proven safe and reliable.

Additionally, each of them relies on the principles of encryption and tokenization. Once a member loads his or her information into the mobile wallet, that data gets replaced with surrogate information that would be useless if intercepted.

Each subsequent transaction uses a dynamic code unique to each transaction, making replication nearly impossible.

2. Virtual card provisioning is the real risk.

Even with the mobile wallet’s security features in storing sensitive information and transacting, the material risk still lies in authentication while the card initially loads to the member’s device.

To date, the only reported security breaches with mobile wallets have occurred during this process. The good news is, the credit union controls that risk.

Credit unions learned from partnering with mobile payment providers to have an authentication plan in place and to be prepared for additional call volume. While the mobile payment providers will aid in authenticating a portion of virtual cards, they’ll defer to the credit union for close calls.

In those cases, an overreliance on a third party to perform that additional authentication has created losses.

No one knows your members better than you, so where possible, try to authenticate members internally or use out-of-band/multifactor authentication.

3. Inform members how to protect their mobile wallets.

Remind mobile wallet users to:

Use malware protection on mobile devices, just as you would for any other online computer.

Update your mobile device’s operating system as soon as updates become available. It seems basic, but sometimes people don’t have the time or the bandwidth for a lengthy download, and they put it off.

Install apps only from trusted sites that vet every app.

If your mobile device doesn’t automatically encrypt data, consider going into the data security menu and enabling encryption. This can slow performance and present other difficulties, but at least consider it.

Consumers ultimately hold the key to the success of mobile wallets. Using them has been proven a safe and secure way to transact. Dispelling myths about mobile wallets, promoting their use, and proceeding with caution during the authentication process are great ways to minimize payment losses.

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